Don Simkovich wrote this blog post for a personal financial services company in Toronto. Italics shows the link back to the company website.

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Title: How to Stay Out of Debt and Grow Your Cash

Trying to avoid debt and take control of your money is like jogging slowly on a treadmill until someone walks by and hits high speed. Suddenly, you’re frantic to catch up. Here’s how to stay out of debt and turn your money into a tool that works for you.

1. Create a planBefore you change your ways, what is your ultimate goal or goals? Whether it’s saving for retirement, planning a vacation, or saving for a special occasion (after essential expenses), having an end game makes saving a lot easier.

2. Set debt reduction goalsLooking at mounting bills is painful, but ignoring them is worse. Determine how much you owe and decide to pay on time. Be aware of exactly how much money is coming in and what your set-in-stone costs are.

3. Watch out for sneaky fees and other costsSometimes when we calculate how much we pay out for essentials monthly we forget things like monthly subscriptions or fees (eg, Netflix, bank fees, credit card interest, etc.). Make sure you include those in your reduction goals!

For high interest debt like credit cards, pay more than the minimum and set a realistic goal to pay off the obligation. Carrying an [ongoing credit card debt] can be a major money drain.

4. Know your spending habitsAn unexpected illness or car repair can force us into a tight money corner until we straighten out cash flow. That’s how [company name and link] work best, securing cash for sudden emergencies. However, spending habits like your daily cappuccino run or the need to buy the newest fashions at full retail prices can keep us in debt longer than necessary.

Honestly look at how you spend money and reduce luxury expenses. Brew great-tasting coffee at home and consider purchasing ‘nearly new’ clothes that look great. Be aware of what your spending triggers are (passing by a certain store or visiting certain websites?) and avoid temptation.

5. Have a cooling off periodHave you ever bought something, spur of the moment? If you’re on impulse shopper, have a strict 24-hour waiting period before you purchase. That cooling-off time may be enough time to assess whether the time is a ‘need’ or simply a ‘nice-to-have’. And remember: if a store is having a sale now, they’ll most certainly have one again in the future.

Climbing out of debt and staying out requires a mindset shift. It’s easy to charge future expenses instead of saving to make your money work for you, but creating a cash reserve gives you choices.

Set aside small amounts of cash in a simple savings account to begin building assets. Cash on hand puts you in the lead while accruing debt makes you follow behind.If you do run into an unexpected financial crunch [contact us]. We’re happy to answer questions about your money needs.